WSI Industries Reports Third Quarter Financial Results

MINNEAPOLIS, MN-(Marketwired - Jun 22, 2017) - WSI Industries, Inc. (NASDAQ: WSCI) today reported sales for its fiscal 2017 third quarter ending May 28, 2017 of $9,594,000 versus the prior year amount of $8,886,000, or an increase of 8%. Year-to-date sales for the period ended May 28, 2017 totaled $22,237,000 versus $27,106,000 in the prior year.

The Company also reported a net loss of $220,000 or $.08 per diluted share for the fiscal 2017 third quarter compared to net income of $78,000 or $.03 per diluted share in the prior year third quarter. Year-to-date, the Company has incurred a net loss of $904,000 or $.31 per diluted share versus net income of $216,000 or $.07 per diluted share in the prior year.

Michael Pudil, president and chief executive officer, commented: "Our third quarter income was affected by one-time expenses related to the change in CEO leadership. In addition, we also realized an impairment in equipment value in the quarter. Without these one-time costs our operations were profitable during the quarter."

Pudil concluded: "We have an excellent existing customer base who are leaders in their respective businesses. In addition, new business efforts in aerospace, energy and industrial markets look promising. We are in a highly competitive and dynamic marketplace and I intend on WSI being a successful leader in our industry."

WSI Industries, Inc. is a leading contract manufacturer that specializes in the machining of complex, high-precision parts for a wide range of industries, including automotive, avionics and aerospace, energy, recreational vehicles, small engines, bioscience and the defense markets.

The statements included herein which are not historical or current facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. There are certain important factors which could cause actual results to differ materially from those anticipated by some of the statements made herein, including the Company's ability to retain current programs and obtain additional manufacturing programs, and other factors detailed in the Company's filings with the Securities and Exchange Commission.


			WSI INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF OPERATIONS			(Unaudited)
In thousands, except per share amounts

			Third quarter ended						Three quarters ended
			May 28,			May 29,			May 28,					May 29,
			2017			2016			2017					2016
Net Sales			$	9,594		$	8,886		$	22,237				$	27,106
Cost of products sold				8,563			7,934			20,692					24,620
		Gross margin		1,031			952			1,545					2,486

Selling and administrative expense				1,203			788			2,684					2,209
Interest and other income				(7	)		(16	)		(10	)				(20			)
Interest and other expense				220			76			354					236
Income (loss) from operations
before income taxes				(385	)		104			(1483	)				61
Income tax expense (benefit)				(165	)		26			(579	)				(155			)

Net income (loss)			$	(220	)	$	78		$	(904	)			$	216


Basic income (loss) per share			$	(0.08	)	$	0.03		$	(0.31	)			$	0.07

Diluted (loss) income per share			$	(0.08	)	$	0.03		$	(0.31	)			$	0.07

Weighted average number of common shares				2,923			2,920			2,921					2,920

Weighted average number of diluted shares				2,923			2,925			2,921					2,929



CONDENSED BALANCE SHEETS (Unaudited)
In thousands

												May 28,				May 29,
												2017				2016
Assets:
Total Current Assets												$	11,714			$	12,746
Property, Plant, and Equipment, net													10,738				11,811
Intangible Assets													2,368				2,376
	Total Assets											$	24,820			$	26,933

Liabilities and Shareholders' Equity:
Total current liabilities												$	4,935			$	3,811
Long-term debt													5,796				7,180
Deferred tax liabilities													823				1,951
Shareholders' equity													13,266				13,991
	Total Liabilities and Shareholders' Equity											$	24,820			$	26,933



CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
In thousands
		Three quarters ended
		May 28,			May 29,
		2017			2016

Cash flows from operating activities (1)		$	2,469		$	3,886
Cash used in investing activities			(786	)		(276	)
Cash provided by (used in) financing activities			166			(1,381	)
Net increase in cash and cash equivalents			1,849			2,229

Cash and cash equivalents at beginning of period			3,739			4,150

Cash and cash equivalents at end of period		$	5,588		$	6,379

(1)	Cash flows from operating activities includes non-cash adjustments for depreciation and stock option compensation expense of $1,589 and $1,518 at May 28, 2017 and May 29, 2016, respectively